Archive for October, 2011

The long term care health costs in this country are out of control, causing the government to throw out their long term care insurance plan and many companies to stop selling long term health care insurance. According to Business Week’s “U.S. Long-Term Health Costs Rise at Faster Pace, MetLife Reports,” Maryellen Tighe reports an increase of 5.6% in assisted living costs last year. It costs more than $41,000 a year for someone to be cared for in an assisted living facility. Nursing home costs increased 4.4% last year, for an average yearly expense of more than $87,000. Adult day care services increased in cost by 4.5% to an average of $70 per day. The cost of having a health aide come into your home stayed the same at $21 per hour.

This year’s increases have been more than in the past, likely because of a struggling economy and skyrocketing health care and energy costs. MetLife, Guardian Life Insurance Co., and Allianz SE have all stopped offering new long term care insurance plans because of skyrocketing costs. There are still 7 million adults with long term care insurance to help cover assisted living or home health care expenses though. Medicaid and Medicare do cover some long term health care expenses, but there are strict qualifications for those programs. Aultcare has to worry about medical inflation rates, but long term health insurance rates have increased even higher than the average medical inflation rates.

The CLASS Act, part of the health care law passed last year, has just been suspended. Tom Curry of MSNBC.com’s article “Obama administration halts part of health care law,” says that the decision is seen as controversial to some Republicans. The CLASS Act was supposed to be a big part of keeping the costs associated with the health care law under control because people would be paying into it immediately, but would not be withdrawing money until at least 2016. It may have been a big reason that the bill was passed in the first place, but Secretary of Health and Human Services Kathleen Sebelius says that she doesn’t foresee any way to make the CLASS Act work.

CLASS is short for Community Living Assistance Services and Supports, and was supposed to be a long term care insurance program. It was still part of the health care bill even though Medicare’s chief actuary raised a red flag about the act in April of 2010. He said that it had an extremely high risk of failure because the sickest people would likely be the ones to sign up for it and the system would be drained. So even though the Congressional Budget Office said that the CLASS Act would reduce federal deficits by $86 billion in 10 years, Secretary of Health and Human Services Sebelius has found that the program is just not sustainable.

Nebraska’s Insurance Director is waiting to see what happens in the federal government before creating a state run health insurance exchange. Bruce Ramge not only wants to determine the state costs of a federal plan, he also wants to see if the health insurance law changes will be upheld in the Supreme Court. He has to compare health insurance exchanges run by his state and run by the government to see what will be in the best interest of Nebraskans. This information comes from the AP article, “Neb. insurance head needs data on exchange cost,” by Grant Shulte.

It could take until June for the Supreme Court to make a decision on whether the health care laws are constitutional or not, and some Nebraska lawmakers worry that waiting until then will put the state way behind on their planning. Each state will have the options of running a state, regional, or federal exchange along with the option of having an exchange run by the federal government. The latter is a state and federal partnership where each party handles different tasks related to the exchange.

So far 16 states have begun the legislation to create health insurance exchanges. Most are just in the beginning stages because the government has not released its minimum coverage regulations. If the state creates minimum coverage that is “better” than the federal guidelines, they will have to cover the cost between the federal subsidy and the care they have mandated. While it could be springtime before the minimums are set, a basic exchange can still be created at the state level. State exchanges will allow Americans to compare health insurance in one easy location and will offer tax credits based on income to help fund the premiums. Follow Nebraska’s policy decisions on their government website.

As they are fighting the federal health exchanges mandated by the government in 2014, Florida is introducing their own slightly different version now. Phil Galewitz’s Washington Post article, “Florida to launch its own health insurance marketplace,” points out that Florida’s version of the plan has significant differences from the federal mandates. The main difference is that Florida’s plan is only offered to small businesses and not to individuals. Small businesses can shop online for health insurance rates from multiple insurance companies with just one application. Florida is the third state with such a partnership between the public and private industries.

There are two more significant differences between Florida’s exchange and the federal guidelines. No subsidies or tax breaks will be offered to the small businesses to help them offer health insurance, while the government plan offers help to its individuals and small businesses. There also is not a requirement for companies to offer what the government deems ‘essential health benefits’ in Florida’s exchange. Since both insurance companies and agents have to pay to use Florida’s exchange, many argue that they don’t see any significant savings being possible. But the Florida government begs to differ and point out many benefits with their exchange. While individuals will still have to look for affordable insurance from plans like Go Blue Florida, small businesses will now get multiple rate quotes with one application and be able to offer up to four different plans to their employees.